Hollande’s uphill battle to stave off redundancies

As concern over redundancies emerges as one of the main challenges facing French President François Hollande’s new government, his minister of industry and growth held talks with Unilever over the planned closure of its factory in southern France.

After little more than a week on the job, France's new minister of industry and growth, Arnaud Montebourg, headed south to the town of Gémenos on Friday to hold talks with Unilever over the planned closure of its Fralib factory. The site, which employs a total of 182 people, has come to symbolise one of the main challenges facing Hollande’s government in the coming months -- redundancies.

Located just 20 km (or around 12 miles) outside of Marseille, Fralib is the only factory in France that produces both Lipton tea and the country’s own Elephant tea brand. Both companies are currently owned by Unilever.

The factory’s employees have fought against the site’s planned shutdown on June 1 since September 2010. As its closure drew nearer, a number of the factory’s workers took to drastic measures, occupying the building for the last several weeks.

Echoing Hollande’s own campaign pledge to maintain pressure on Unilever to reach a redundancy agreement with the factory’s employees, Montebourg declared his intention to "open concrete talks” on the issue one day after being appointed minister.

After his arrival in southern France on Friday, Montebourg announced that “Unilever agreed to return to the negotiating table”, just a week shy of the factory’s planned closure.

While the news may come as a small victory for Fralib workers, it also marks the beginning of what promises to be an uphill battle for Hollande’s new government to deal with unemployment in the country, one that Montebourg warned against even before becoming minister.

“There are redundancy deals that were shoved into a freezer during the election period that are now coming out”, Montebourg reportedly said in an April 30 interview with French daily Libération. “We will see further damage in big businesses in a very short amount of time”.

Promises to keep

With soaring unemployment and deepening concerns over the eurozone debt crisis, Hollande's campaign focused on economic growth and jobs at home -- with the president-to-be promising to bring the country’s unemployment rate well below its current near 10-percent level during his mandate.

Hollande also vowed to create thousands of government-related jobs by the end of his term, but it appears that, at least in the short run, keeping his promise to reduce unemployment may be a challenge.

French unions have expressed concern over the possibility that supermarket giant Carrefour plans on cutting thousands of jobs in 2012; and Air France grabbed headlines earlier this week after acknowledging that they were “overstaffed”, sparking fears that thousands of positions were on their way out the door.

“It is certain that more jobs will be eliminated in 2012 and probably 2013. We will see less permanent and temporary contracts being offered, as well as less part-time jobs, and less people being replaced after leaving a company”, Eric Heyer, deputy head of the French Economic Observatory analysis and forecasting department, told FRANCE 24.

With slashes anticipated in sectors ranging from industry to aviation, it looks increasingly as though the standoff between Fralib factory workers and Unilever is merely the tip of the iceberg.

“People are talking about redundancy deals to such a huge extent because they are symbolic [of job losses]”, Heyer said. “It will be very complicated for Hollande to reduce unemployment”.